Bush Finds Economy Is An Unrelenting Foe In Election Year

Bush Finds Economy An Unrelenting Foe

WASHINGTON — President Bush has run out of time for a dramatic revival of the economy by Election Day, political and economic experts say.

Not only do they see the country mired in a slump that will not go away quickly, they see a nation plagued by an extraordinarily glum consumer mood. Neither, they feel, will disappear before Nov. 3.

"I don't think there's anything left to do," said Tucker H. Adams, chief economist at the Central Banks of Colorado in Denver. It's a feeling shared by many other experts.

"Turning the American economy around is like turning a giant steamship," she said. "It moves slowly."

Traditionally, government can almost instantly jump-start a stalled economy, usually by pushing interest rates down or by creating public works jobs.

But the current mess is not something that can be solved on a balance sheet. Not only have national surveys found many consumers terrified about their futures, but analysts find a new problem working against a quick recovery:

Consumers are aging. The babyboom generation is at a point where it needs fewer videocassette recorders and more annuities. People are taking vacations, but they are long weekends on Cape Cod, not two weeks in Europe. They are eating out as much as ever, but are looking for cheaper meals.

They are spending, but spending carefully.

"People are just more upset with the economy than you might expect," said Ray C. Fair, professor of economics at Yale University, who is well-known for his research on the relationship of the economy to the election.

All this is the worst possible news for an incumbent president less than 90 days before he has to run for reelection, because American political history has shown over and over that except in wartime, no issue moves people like the economy.

For some time, Bush has wondered out loud what all the complaining is about. Even last week, in an interview with USA Today, he partially blamed the press for creating the idea that the

economy is lagging.

"Who is it that convinces the American people ... that everything is bad in terms of an economy that has been growing?" Bush said. It is the press, which likes to distort the facts, he said.

Even in the consumer's world, many analysts agreed, there are lots of reasons to think things are okay, as statistics show people are still trying hard to spend their money on a good time.

The National Restaurant Association, for instance, found that 43 percent of all Americans have bought food prepared away from home -- at a restaurant, carry out or delivered -- thus far this year. That's up from last year, and way up from the 38 percent of 1982, during the last recession.

"This is the first economic downturn ever where the percentage of people eating out has not gone down," said Wendy Webster, association spokesperson.

It's also a strange downturn in that people are vacationing as much as ever, said Joseph P. Horak, spokesman for the U.S. Travel Data Center, a Washington-based group that conducts research for the travel industry.

Last year, for instance, the number of trips of 100 miles or more that lasted one to five nights was up 32 percent over 1990, he said.

What kind of economic slump is this, anyway?

It's one for the 1990s, one that will not respond to the usual political stimuli, said Lawrence H. Wortzel, professor of marketing at Boston University and an expert on consumer behavior.

Look behind the data, say those who compile it, and you'll find people looking for lower prices. They take lots of weekend trips, said Sarah Mann, Massachusetts' director of tourism, but are looking for the special weekend rates offered by many hotels. They buy a lot of food away from home, said Webster, but a lot of it is pizza and subs, not the fancy dinner.

There is logic to this behavior. The same reasons people keep spending on food and vacations are the same reasons they are spending less on big-ticket items, experts said.

The reasons:

The baby-boomers are now in their 30s and 40s and have bought most of the big-ticket items, such as microwave ovens, personal computers and videocassette recorders, that they will need for a while.

"We've reached the saturation point," Wortzel said. "Most demand now is to replace things that have worn out."

As the population ages, it looks more to its practical needs in the future. Savings, both for retirement and the children's college education, become far more important to babyboomers, people born between roughly 1946 and 1964, than it was a decade ago.

"The baby boom generation has a tremendous impact on the economy," said Adams. "If they follow traditional patterns, they will have accumulated lots of debt in their 30s as they build their households, and save a lot of money in their 40s."

But if people are scared, and they want to save, why spend money on leisure?